Wharton Stories

Wharton Students Make a Case for Bringing Amazon’s Headquarters to Philadelphia

Image: Amazon HQ2 to Philly Case Competition winners and judges

When Amazon asked cities to bid to host its second North American headquarters, Wharton students answered with two competitions to persuade the tech retail giant to choose Philadelphia. The winners and finalists presented to judges and Philly Mayor Jim Kenney on October 13, 2017.

Amazon set off a frenzy in municipalities across North America when it announced plans to build a second headquarters, codenamed HQ2. The company estimates that they plan to invest over $5 billion in construction and to grow this second headquarters to include as many as 50,000 high-paying jobs.

They’re looking to cities and regional economic development organizations to submit proposals explaining why Amazon should set up HQ2 there. By providing detailed figures and statistics about their current headquarters in Seattle and the specific criteria that they are looking for, Amazon is making this a public process.

Students and faculty at Wharton decided to support the city’s candidacy through both a writing competition and a case competition. Philadelphia is a strong contender, picked by Moody’s as one of the top three cities for HQ2.

The Student-Led Case Competition

While the writing competition was led by faculty, the case competition was a student initiative that grew out of the excitement around the Amazon opportunity.

Two undergraduate clubs at Wharton, The Sig.nal and the Marketing Undergraduate Student Establishment (MUSE), collaborated to organize the Amazon HQ2 to Philly Case Competition, which was open to both MBA students and undergrads. Teams of two to four submitted both a presentation summary on one of four subtopics: financial and tax incentives, talent base and employee incentives, strategic tech-focused incentives, current and new legal incentives.

The Friday morning final presentation was hosted by Laura Gao, W’18, co-director of The Sig.nal and a former product data analyst intern at Amazon. Philadelphia Mayor Jim Kenney introduced the event, claiming the proposal process “will be a template to attract companies as big as Amazon as well as small to medium sized companies to Philadelphia.”

Said Kenney, “This city can do anything that it sets its mind to do.”

The four finalist teams highlighted the key advantages of choosing Philadelphia to be the home of Amazon’s HQ2.

Team Wharton Prime, for example, laid out a set of hefty financial incentives ($12.5 billion to $15 billion in tax breaks and free land) and suggested that the city’s government instate an “Amazon Happiness Officer” who would serve as the company’s primary point of contact to cut red tape.

With respect to technological infrastructure, Team Delphi recommended that Amazon partner with Comcast to use their machineQ platform. The team added that this platform, based on the LoRa technology standard, will give Amazon customer data to analyze that they previously did not have access to.

Team Meseeks highlighted talent and employee life incentives for Amazon, pointing to the fact that “Philadelphia has a unique ability to retain talent through its cost of living,” and that “there is a strong momentum of college talent choosing Philadelphia.”

Finally, presenting on legal incentives, Team Philly Cheesesteaks reiterated the fact that “Philadelphia has a unique ability to retain talent through its cost of living,” before going on to propose a totally new idea. To reduce the legal barriers that skilled talent outside of the U.S. face, the team proposed starting “an immigration entrepreneur visa program” similar to Massachusetts’s Global Entrepreneur-in-Residence program.

Melinda Hu, W’20, a member of The Sig.nal, commented on her own experience organizing this case competition and how she felt about it. “I was glad that I could help promote the spirit of tech, excitement for our city, and student creativity all in one event! I thought it was amazing how students applied what they’ve learned or read about into convincing proposals that could really potentially affect our city.”

Making the Proposal via a Writing Competition

The Wharton Communications Program launched the Amazon Writing Competition to give undergrads and MBAs the opportunity to advocate for the City of Philadelphia. Entries took the form of a 500- to 750-word proposal.

Lisa Warshaw, Director of the Communications Program, not only said that “we always look for ways to have engaging writing assignments,” but also emphasized, specifically in the context of this competition, that “students chose to write. They didn’t have to.”

The Program’s panel of judges featured journalists from a range of leading publications, from the Financial Times and the Associated Press to the New York Times and the BBC, three of whom are Pulitzer-Prize winners.

The winners, Brian Simel, WG’18, and Shehryar Khursheed, W’21, were honored by Mayor Kenney at the city of Philadelphia’s Amazon proposal submission party held at the Barnes Foundation. Kenney noted that Philadelphia’s final proposal quoted Shehrya’s memo:

“If Amazon is looking for thinkers, doers, and revolutionaries; if Amazon is looking to change the status quo, to push the boundaries on knowledge, to ripen the environment for change; if Amazon is looking for a testament to the past and a plan for the future, its next stop should be Philly.”

The Headquarters Checklist: How Do Companies Pick a Location?

Amazon may be huge, and the bounty for the winning city potentially life-changing. But when casting about for a second North American headquarters, what matters to Amazon are many of the same things that matter to many other companies.

“For most businesses, the issue of location choice now is driven by labor: Will we be able to attract the white collar skills we need?” says Wharton management professor Peter Cappelli, director of School’s Center for Human Resources. “For unskilled or semi-skilled jobs, will we be able to get it at a price we want to pay? No business goes to the Silicon Valley or New York City because it is cheap; they go because of the labor supply.”